BAC and MIGA sign an agreement marking the first-ever issuance of MIGA’s capital guarantee in the MENA region
BBAC (Bank of Beirut and the Arab Countries) recently announced that MIGA (The Multilateral Investment Guarantee Agency), a member of the World Bank Group, has issued 67 million USD in guarantees to the bank to facilitate financing for Small and Medium–sized Enterprises (SMEs) by increasing its loan portfolio across BBAC branches in Iraq. The signing ceremony of the agreement took place at the BBAC Head Office, in the presence of BBAC and MIGA management.
“At 12%, Iraq has the lowest credit-to-GDP ratio in the MENA region, with only 9.3% directed at the private sector and toward meeting reconstruction needs”, BBAC Chairman & General Manager Ghassan Assaf said. “This guarantee allows us to expand our SME loans and trade finance activity in Iraq, which will help promote economic growth of the country”, he added.
From his side, MIGA COO & Vice President Vijay Iyer said: “We are pleased to provide MIGA’s Capital Optimization Guarantee to BBAC allowing them to grow their operations in Iraq, thereby supporting the financial sector in a fragile and conflict-affected country.”
BBAC started operations in Iraq in 2009 achieving significant results, and the bank is looking to expand its operations and grow its portfolio in Iraq. Nearly 19% of BBAC Iraq’s loan portfolio in the year 2018 supported SMEs, and close to 60% of exposure was in construction loans. MIGA’s guarantee will help BBAC mitigate the risk of expropriation of mandatory reserves that it maintains with the Central Bank of Iraq and extend more credit to SMEs and trade finance in the country.